Wind en­ergy firms’ plea to sus­pend PPA clauses re­jected

TNERC says the rid­ers en­sure level-playing field

Tamil Nadu Elec­tric­ity Reg­u­la­tory Com­mis­sion (TNERC) has re­jected a plea by two pri­vate wind power gen­er­a­tors to can­cel cer­tain clauses in the power pur­chase agree­ment (PPA) signed with Tamil Nadu Gen­er­a­tion and Dis­tri­bu­tion Cor­po­ra­tion (Tangedco).

Last year, Tangedco had agreed to pro­cure 200 MW of wind en­ergy from ReGen Pow­ertech Pvt Ltd and 250 MW from Corolla Green Power Pri­vate Limited (100% sub­sidiary of Leap Green En­ergy Pri­vate Limited) for ₹3.42 per unit af­ter they emerged as suc­cess­ful bid­ders through a ten­der process.

In sep­a­rate pe­ti­tions, both com­pa­nies sought for sus­pen­sion of two clauses in the power pur­chase agree­ment.

One of the clauses said that ca­pac­ity util­i­sa­tion fac­tor (CUF) for the wind power project shall be in the range 20% to 27.15% and for any ex­cess gen­er­a­tion be­yond that the Tangedco will buy the ex­cess gen­er­a­tion at 75% of the agreed tar­iff as per the agree­ment. The de­vel­op­ers have to pay Tangedco in case of short­fall in out­put, ac­cord­ing to the clauses.

CUF is the mea­sure of how well a plant can be utilised. It is pre­sented as a percentage of the in­stalled ca­pac­ity of a plant. CUF is the real out­put com­pared to the­o­ret­i­cal max­i­mum out­put.

Ob­li­gated to buy

An­other clause was that the pri­vate wind pro­duc­ers are free to re-power their projects dur­ing the du­ra­tion of the agree­ment. How­ever, the State util­ity will be ob­li­gated to buy power only within the spec­i­fied ca­pac­ity util­i­sa­tion fac­tor as per the agree­ment and it will buy any ex­cess gen­er­a­tion at 75% of the agreed tar­iff. The com­pa­nies said the clauses re­strict them from pur­su­ing ad­vanced tech­nolo­gies for wind en­ergy gen­er­a­tion.

How­ever, the TNERC re­jected the pleas and said the clauses not only en­sure ef­fi­ciency but also dis­cour­age gen­er­a­tion be­low the ca­pac­ity, which pro­tects the con­sumer in­ter­est. It said the clauses pro­vide a level playing field and en­cour­age the de­vel­op­ers to gen­er­ate not only up to their po­ten­tial but also re­ward them for ex­cess gen­er­a­tion with payment of 75% of the tar­iff.